The financial crisis and differences in state pension generosity across EU countries

Abstract

In pensions, major reforms, to some extent, predate the onset of the financial crisis. However, the crisis has led to significant changes - especially in those countries that had left their pension systems relatively unchanged prior to 2008. These cuts should lead to considerable convergence in system generosity across countries. State pensions in the stressed economies, even after the cuts, should still be generous enough to keep the majority of pensioners out of relative poverty. However, for this to be the case, there needs to be a recovery in employment amongst the younger generations, as the reformed pension systems have introduced a stronger link between entitlements and contributory records.